Cathay Pacific's passengers look set to be spared a summer of flight misery after the airline's cabin crew union called off an August strike action in its dispute over pay and benefits. After a second day of negotiations, both sides settled their differences and, together with Labour Department representatives, signed a memorandum. Such an outcome seemed unlikely at one point last night as representatives of the Cathay Pacific Airways Flight Attendants Union stormed out of the meeting room in protest at the airline's "lack of sincerity". But two hours later they managed to sign the memorandum. "We have decided to call off all of our preparation for the strike action for now," said Dora Lai Yuk-sim, chairwoman of the 6,300-member union, which represents 70 per cent of the airline's flight attendants. "I hope that we will be able to improve our relationship from now on." The memorandum sets out a framework of what both sides have agreed on. On Monday they will sign an agreement that has legal implications. But the union warned that if the agreement deviated from what both sides had settled on, it would press ahead with an August strike. The union's fight centred on three issues, with its first demand concerning employees who had finished their initial three-year training contracts. Those who signed permanent contracts before April 2 were awarded a pay increase from HK$144.70 per hour of flight time to HK$176.80. But those who signed after April 16 would see their hourly wages rise to only HK$159.30. The union was seeking an hourly rate of HK$176.80 for all. Secondly, it wanted to reverse a cut in the lunch allowance for flight attendants in Melbourne, granting them A$60 (HK$372) per meal instead of A$35. Thirdly, it wanted the airline to reinstate a legal protection clause in its operational manual that it had earlier deleted. The line states that the airline will "cover all legal costs resulting from an incident occurring whilst on duty". The airline had satisfied the union on all three demands and also promised it would inform the union if it made any changes to the allowance in future. The signing of the memorandum took place just two hours after angry unionists stormed out of the meeting room, accusing the airline of "fooling" them. They said the airline's position all along was that the union would be signing a memorandum. But just as the union was about to put pen to paper on the document, they were told it was an agreement that they would be signing. The union said it was outraged by this because an agreement has legal implications that needed to be studied carefully before signing. Two hours later, both sides settled their dispute. The airline's director of corporate affairs, James Tong, did not explain clearly why the memorandum would suddenly become an agreement. "The most important thing is that we all eventually reached a consensus on all the items," he said.